Types of Investment Companies

If you live in Los Angeles California looking for investment companies, then you must have searched for investment companies losangeles ca online. Upon hearing the word investment, we can directly accompany the term ‘future’. Yes, investment is for the future, because we do not know what tomorrow brings and we always wanted to be assured our security and to our whole family. This explains that investment is very important, that is why millions of people are resorting to investment in order to secure their future. The question goes like this, how? When should you start? Well, the most effective way is to choose a dependable investment company. But first, we will be sorting out the types of investment companies for you to have idea of it.

Types of Investment Companies

Management Investment Companies – The most common of all types of investment companies, management investment companies reach its objectives by managing a portfolio of securities. You probably heard of closed-end and open-end company right? These two are actually the type of management investment company. The difference of the two is explained below:

Closed-end Investment Company – This type of investment company offers and issues shares only in a one-time public offering. From the term itself, they do not offer new shares continually and does not redeem its shares unlike the second type which is the open-end investment company.

Open-end Investment Company – Unlike closed-end Investment Company, Open-end offers new shares continuously. It is also called as mutual funds. One of its characteristics is that the shares it offer can be only purchased and sold back from the investment company.

Unit Investment Trusts (UITs) – This type of Investment Company provides a fixed portfolio of mostly stocks and brands. UIT companies offer this to investors as redeemable units in a particular period of time. There are several characteristics UIT including:

A trustee is the one who supervises the management.

There is a fixed number of shares to unit holders sold by UIT who will receive their proportionate share of net income from the underlying trust.

Face Amount Certificates – This type of company issues debt securities to its investors with a predetermined interest rate. Truth is you can barely find face amount certificate companies that operate nowadays. The following are some of its characteristics:

Payment of certificates can be lump-sum or could be purchased in periodic installments.

Certificates can be redeemed by certificate holders on a particular period of time for a fixed rate before its maturity.